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Kolkata: Indian railway ferries more than 700 crore passengers a year, a number that is about 85% of the population of the entire world. It is likely that FM Nirmala Sitharaman will continue to bestow as much attention to the railways as she did in earlier years. However, it has been reported that the allocation to this sector could be a little moderated compared to the earlier years.
In FY25, the railways transported more than 1.61 billion tonnes of freight which is a record. The tonnage makes it the world's second-largest rail freight mover after China. The railways also earned a revenue of more than Rs 2.62 lakh crore. The allocation for the railways was Rs 2.65 lakh crore in FY26, which is the same as in FY25. While there is an opinion that the allocation might be slightly less for FY27, the railways will be one of the vehicles of the government to boost economic growth and modern transportation across the country.
Among the focus areas of the government for improvement in the railways will be track expansion, electrification (though this task is aubstantially done), signalling upgrades, improvement in freight handling and redevelopment of stations. Proper and timely completion of ongoing projects could be a priority rathan than new headline-hogging announcements. “In terms of beneficiaries, rail infrastructure and EPC segments are likely to gain the most. These projects involve long pipelines and steady work orders. Rolling stock manufacturers should also see demand, but growth there may be more gradual. Overall, the Budget is expected to support steady, long-term growth for the rail sector rather than trigger an immediate spike in activity,” Ravi Singh, chief research officer at Master Capital Services, was quoted as saying.
According to reports, Vivek Lohia, MD, Jupiter Wagons thinks that the allocation to railway could just be raised by about 5% which would include extra-budgetary resources. “With electrification nearing completion, capital deployment is likely to be redirected toward easing congestion through new lines, gauge conversion, track doubling, and the expansion of Dedicated Freight Corridors and economic corridors linked to ports and mineral clusters,” Lohia told the media.
The extra-budgetary resources can be market borrowings that can be raised by Indian Railway Finance Corporation and financing from institutions such as LIC or PPPs (Public-Private Partnerships) and external commercial borrowings. These could be adopted to fund new lines, gauge conversion and rolling stock procurement etc.
